A handful of Davids fought hard against the Goliaths in a tough year for telcos
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A smattering of ASX-listed small cap telecommunications companies were able to take the fight to the industry’s behemoths in 2018, but overall the sector was down 20 per cent since the start of the year, a Stockhead analysis shows.
There are 30 or so listed telcos, from small to mid cap, but it has traditionally been hard for those at the smaller end to make a dint in a landscape dominated by the likes of Telstra, Optus, Vodafone and TPG.
In fact, a recent analysis from research house Bain found that only one-fifth of telco challengers have increased their revenue and cash flow this decade.
Of 83 companies studied by Bain, 12 had ceased to exist by 2017, 53 were unsuccessful and just 18 were “sustained value creators”.
And a look at the ASX-listed telco sector shows that only seven companies have gained ground over the course of 2018, while overall telcos are down 20 per cent since New Year’s Day.
That includes the biggest, Telstra (ASX:TLS), which has lost 20 per cent of its value in a rough year, down to $2.89 after starting the year at $3.63.
Nonetheless, several had positive years, led by the company formerly known as Inabox Group (ASX:IAB). It is now nothing but a shell named IAB Holdings, after fellow telco MNF Group (ASX:MNF), which owns MyNetFone, bought it out.
Inabox turned things around bit by bit in 2018 after a 2017 acquisition turned sour and cost the company the bulk of its value.
On Friday, it was trading at $1.00, a 105 per cent increase on the start of the year. It will look to delist early next year, however.
Three other small caps have been able to make ground in 2018. Data roamer Flexiroam (ASX:FRX)broke even for the first time in three years and its shares have risen 20 per cent to be trading at 5.5c on Friday.
5G Networks (ASX:5GN), which earlier this year picked up two of Inabox’s subsidiaries, is up 12 per cent to 41.5c, while Spirit Telecom (ASX:ST1) has gained 6pc.
Hutchison Telecom (ASX:HTA), the half owner of Vodafone, has risen 77 per cent this year largely thanks to its proposed merger with TPG Telecom (ASX:TPM). The ACCC has expressed concerns about the deal.
Down the other end of the scale, Wonhe Multimedia (ASX:WMC) has lost 88 per cent of its value, dropping to 2c after starting the year at 16.5c.
Reverse Corp (ASX:REF), the company behind 1800-Reverse, has fallen 59 per cent to 2.9c after Telstra cut ties with the company.
And though MNF Group is bullish now it has acquired Inabox, it hasn’t been a great deal for the company’s shares; they’ve fallen 39 per cent from $6.36 to $3.90.
Here’s a table of ASX-listed telco stocks and their share price performance since the first of Jan:
Scroll or swipe to reveal table. Click headings to sort
|ASX code||Company||Price 1 Jan 2018||Last price||Pct change||Market cap|
|IAB||INABOX GROUP LTD||0.49||1.005||105%||23,818,128|
|MAQ||MACQUARIE TELECOM GROUP LTD||15.11||19.95||32%||421,902,432|
|5GN||5G NETWORKS LTD||0.37||0.415||12%||21,201,054|
|ST1||SPIRIT TELECOM LTD||0.15||0.165||10%||41,643,224|
|VOC||VOCUS GROUP LTD||3.03||3.225||6%||2,072,138,496|
|TPM||TPG TELECOM LTD||6.57||6.335||-4%||5,984,384,000|
|SEN||SENETAS CORP LTD||0.105||0.093||-11%||96,236,760|
|FSG||FIELD SOLUTIONS HOLDINGS LTD||0.029||0.024||-17%||10,320,346|
|TLS||TELSTRA CORP LTD||3.63||2.89||-20%||34,847,363,072|
|SDA||SPEEDCAST INTERNATIONAL LTD||5.36||3.54||-34%||885,878,528|
|MNF||MNF GROUP LTD||6.36||3.9||-39%||284,704,160|
|NTC||NETCOMM WIRELESS LTD||1.2||0.715||-40%||106,820,832|
|SW1||SWIFT NETWORKS GROUP LTD||0.465||0.24||-48%||29,115,096|
|AYS||AMAYSIM AUSTRALIA LTD||1.99||1.025||-48%||217,116,592|
|REF||REVERSE CORP LTD||0.071||0.029||-59%||2,692,956|
|SAS||SKY AND SPACE GLOBAL LTD||0.175||0.058||-67%||108,910,408|
|UNL||UNITED NETWORKS LTD||0.065||0.016||-75%||2,013,199|
|CIO||CONNECTED IO LTD||0.0213||0.003||-86%||5,194,308|
|WMC||WONHE MULTIMEDIA COMMERCE LT||0.165||0.02||-88%||3,039,036|
|TPC||TPC CONSOLIDATED LTD||1.3||n/a||n/a||11,235,613|